Back in 2012 when I began my speaking career, I made some very bold predictions about the direction of the U.S. economy and the consequences for the home goods industry. Fortunately for me, most of my forward looking insights actually transpired. So it is with a sigh of relief that I now sit down at my desk and look out over 2018. I say this because economics is not exactly a science but it is about looking at the data and making judgments based on the trend lines of how consumers and corporations are going to react to the data. So while I hit my prognostications over the past five years, this year is going to take a larger crystal ball.

Consumer confidence hit a nine year high in 2017 as consumers were feeling good about their job prospects, pay increases and the ability to find work. We have now watched as confidence grew from a low of 38.7 in 2008 to around 120.5 in 2017. Confident consumers make better customers who are willing to spend money to achieve their desires and dreams. Consumer confidence will remain optimistic throughout 2018 baring any cataclysmic event.

Consumer spending, although not nearly where we wanted it to be last year, has been robust, especially in the second half. As I write this looking at the September report, spending was up 1% as shoppers were out in force during the month. Predictions are for a 3.2% increase in consumer spending in 2018.

Gross Domestic Product or GDP could end 2017 up around 2.7%. GDP is defined as the amount of goods and services America produces in one year. If this number is going up then all boats rise. Even though we have been in one of the longest expansions in U.S history, I am convinced that we still have more growth coming this year, so my number in 2018 is a 2.9% increase in GDP.

The stock market’s advance since Mach 2009 is now the second longest bull market run in U.S. history. Markets rise when publicly held corporations are profitable and we have seen an unprecedented run of revenue and bottom line growth over the past nine years. I stopped making predictions about our financial markets but if we get tax reform and infrastructure spending the stock market will continue to grow in 2018.

Lastly, job creation will remain steady, unemployment will drop to 3.9%, a number not seen since 2009.

I am always accused of being too optimistic, so here are some downsides to watch for in 2018.

There is a student loan crisis that is facing an entire generation of college graduates and they now take on the burden of paying down more than $1.34 trillion dollars of debt. This will be a drag on the economy for decades and will hamper starter home sales, the purchase of home goods and will prevent many young men and women from starting families.

Subprime loans on the sale of new automobiles have grown rapidly and are now hovering around $300 billon dollars. While not in the same ball park as the subprime mortgage debacle of 2008, it has the potential to hamper economic growth if these consumers default on existing loans. This will create a drag on consumer spending and slow economic growth.

So this is my direction in 2018, it will be a year much like we witnessed in past years, moderate growth, full employment, American workers with good jobs and rising wages. Consumers will be in your stores in 2018 spending money but remember that we are entering the tenth year of an economic expansion. There are economists who see a recession beginning next year, I am not one of them but even if we have a recession it will mild compared to what we all lived through in 2008.